J.C. Penney swings to Q4 profit on tax benefit, but revenue falls

New York -- In a sign of some progress in its turnaround efforts, J.C. Penney Co. reported a net profit of $35 million for the fourth quarter ended Feb. 1, 2014, compared to a loss of $552 million a year ago. Excluding a tax benefit and other items, Penney had a loss of $206 million for the quarter.



Looking forward, the company expects same-store sales to increase approximately 3% to 5% for the first quarter and to increase mid single digits for the full year 2014.



Net sales for the quarter, ended Feb. 1, 2014, fell 2.6% to $3.78 billion from $3.88 billion in the year-ago quarter, which included an additional 53rd week. Analysts had expected $3.85 billion.



Same-store sales rose 2.0 % for the quarter, with holiday sales up 3%. Online sales were $381 million for the quarter, up 26.3% versus the same period last year, excluding the 53rd week.



The company’s top performing merchandising divisions were home, men's apparel, women's accessories and Sephora.



"J.C. Penney achieved what it set out to do on a number of important fronts in 2013,” said CEO Myron Ullman. “We stabilized our business, both financially and operationally, and restored our process disciplines, promotions, inventory levels and focus on the customer. As a result, we generated positive comparable store sales in the fourth quarter and ended the year with more than $2 billion in total available liquidity.”



For the full year, the company reported an operating loss of $1.42 billion, which includes $215 million of restructuring and management transition charges.

Ullman said the retailer's turnaround is gaining momentum.



"With the most challenging and expensive parts of the turnaround behind us, we will focus on improving gross margin, managing expense and steadily growing our sales in 2014,'' Ullman said. “Our strategic plan seeks to enhance performance across all of the key drivers of our business: merchandising, marketing, store experience, jcp.com, our teams, and our operations. The goal is to deliver consistently improving financial results, and to restore J.C. Penney as a leader in American retail."